A price revision of fuel distributed by the Ceylon Petroleum Corporation (CPC) is in the offing, according to highly placed government sources.

The Indian oil company, Lanka IOC has already increased their prices to be on par with the world fuel price hikes. However, CPC prices have remained static for nearly a month incurring heavy losses.

The weekly loss due to this has been calculated at Rs.266 million, Petroleum Resource Ministry sources said.Taking all this into consideration, an oil price revision is likely according to Finance Ministry Secretary Dr. R.H.S Samaratunga.

He said the need for the pricing formula is essential and they were in the process of finalising the matter with the Petroleum Resources Ministry. Dr. Samaratunga told the Daily News that they were in the process of finalising a fuel price formula to be implemented after the Sinhala and Hindu New Year.

He however said they would have to meet with Petroleum Resources Development Ministry officials to finalise the proposal. “This price revision formula will need to be sanctioned by the Petroleum Resources Ministry before being tabled in Cabinet.”

Another official also confirmed the final price formula will be submitted to Cabinet for approval following discussions between the two ministries. Petroleum Resource Development Ministry Secretary Upali Marasinghe recently said that a pricing formula is essential if CEYPETCO is to remain sustainable.

CEYPETCO was said to be incurring a loss of Rs. 266 million weekly following the fuel price hike by Lanka IOC.

He had said that the Ministry and the CPC were in agreement that a pricing formula was the only way out of the crisis, adding that a mechanism needed to be worked out by the Treasury first.

The Finance Ministry has agreed with the International Monetary Fund (IMF) that as part of the sequence on energy pricing formula, it would implement a cost reflective price formula for fuel which would be approved by cabinet by March 2018,a similar mechanism for electricity by September 2018 as a condition for the US$ 1.5 billion loan taken. This is referred to as non-commercial obligations (NCOs).